UK Airlines Urge BAA To Cut Back On Gatwick Spending

by Robin Pilgrim, LawAndTax-News.com, London

01 June 2009

Three of the UK's top airline companies have appealed to the British Airports Authority (BAA) in a bid to curb its plans to spend up to GBP900m (USD1.4bn) on improvements to Gatwick airport.

In a letter to BAA, British Airways, easyJet and Ryanair urged the authority to cut back on the spending project for fear it will ultimately push up ticket prices, causing passenger numbers to fall further in an industry which has already been ravaged by the recession.

BAA plans to spend the GBP900m (USD1.4bn) on improving Gatwick over the next five years, despite the fact that it is currently trying to sell the London terminal. The trio of airlines used this, in addition to a 12% drop in traffic over the past 12 months, to try to persuade BAA that its business plan is unworkable.

"At this time, when all the Gatwick airlines are facing a level of unprecedented commercial challenge, the airport is seeing dramatically reduced passenger throughput and many analysts are forecasting a slow recovery, it would not be sensible to proceed without a proven business case," the committee's letter stated.

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